Impacts of Customer Relationship Management Implementation on Customer

Satisfaction in Hotels: Case of a Budget Hotel Chain in the UK

Corresponding Author: Dr Roya Rahimi

Department of Marketing, Innovation, Leisure and Enterprise (MILE)
University of Wolverhampton
United Kingdom
Email: ​roya.rahimi@wlv.ac.uk

&

Professor Metin Kozak

Department of Tourism
Dokuz Eylul University, Turkey
Email: ​M.Kozak@superonline.com

Abstract
Customer Relationship Management (CRM) is a successful marketing strategy that has been
proven to improve customer satisfaction and retention in the hotel business. CRM can bring
many benefits to the hotel business, though there are some associated challenges such as the
implementation process, which can prove to be time consuming, expensive, and complex in
nature. Such challenges often bring a significant risk of failure, and these risks become more
significant in budget hotels, due to inadequate supporting budgets and the lack of strong
branding and loyalty schemes. This study considers the changes that have emerged in the last
decade as regards customer expectations when staying in budget hotels. We use qualitative
approaches to investigate the overlaps between customer expectations and managers’
perceptions of CRM applications. The findings reveal that regardless of all changes, value for
money and core products continue play a critical role in customers’ overall satisfaction of
budget hotels. This suggests there is a need to align management and customer perspectives
on CRM, in order to optimize customer value in terms of delivery and experience.
Keywords: Customer Relationship Management (CRM), Customer Satisfactions,
Satisfaction Criteria, Customer Expectation and Budget Hotels.

Introduction

1
Customer Relationship Management (CRM) is based on the principles of Relationship
Marketing (RM), a developing area of modern day marketing (Sheth and Parvatiyar, 2000;
Hung et al., 2010). This was brought to the attention of hotel managers in the early 1990s, as
a result of hotels gathering information on their customers based on preferences and
requirements. This information was used to increase the likelihood of customer satisfaction
and retention (Dyche, 2002). Peppers and Rogers (1993) proposed that in future, businesses
would not try to sell a single product to many customers, but would instead try to sell many
products to a single customer over an extended period of time. This approach paved the way
for the transition from RM to a new approach, known as CRM. The CRM approach
concentrates on building unique relationships with individual customers on a one-to-one
basis, in order to secure and manage long-term relationships (Zablah et al., 2004).

Nowadays, hotel businesses face an increasingly competitive market, and there is a greater
need to offer a range of differing products and services to a diverse customer base. CRM has
therefore become a strategic imperative, enabling hotels to customise their offerings for each
customer to suit individual tastes and to facilitate the processing of customer orders (Feinburg
et al., 2002; Mithas et al., 2005; Meyer and Schwager, 2007)​. Hotels can collect and integrate
significant amounts of customer information through different channels and guest cycles.
Consequently, CRM can be viewed as an opportunity for hotels to use this information to
improve both the quality of their services and their relationship with customers (Kasin and
Minai, 2009), leading to greater levels of customer satisfaction and retention. Within just a
few years, the CRM strategy has attracted the interest of luxury and business hotels. Perhaps
more revealingly, budget hotels have started to consider the benefits of applying certain CRM
functions with the aim of retaining their customer base (Blankson and Stokes, 2002).

Budget hotel customers attach more importance to value for money than to loyalty,
recognition, and customized services (Luck and Lancaster, 2013; Brotherton, 2004; Hua et
al., 2009). Nasution and Mavondo (2008) emphasise the responsibility of hoteliers to provide
superior customer services, but service provision can be viewed from two different
perspectives, that of the service provider and that of the customer. It is to be expected that
these perspectives will differ. CRM applications are time consuming, expensive, and carry ​a
significant risk of failure (Bose, 2002), and these challenges are more significant for budget

2
hotels (Moriarty et al., 2008), which do not have the supporting budgets (Ozgener and Iraz,
2006) or the strong branding and loyalty schemes characteristic of large hotels (Imrie and
Fyall, 2000). Given these challenges, it is clear, based on a literature review, that there has
been insufficient research into the actual impact of CRM implementations on customer
satisfaction for budget hotels (Brothern, 2004; Luck and Lancaster, 2013). The current study
will attempt to address this gap, and to investigate the potential overlaps between customer
satisfaction criteria (the customers’ point of view) and CRM implementation outcomes (the
managers’ point of view), focusing on the case of a budget hotel in the UK. This is the first
ever study to investigate this impact from both perspectives.

Literature Review
Although CRM has been debated in studies focusing on various industries over the past two
decades (​Croteau and Li, 2003; Sigala, 2005), many disagreements remain with regard to its
definition. Some of these studies relate it to the acquisition and long-term retention of
customers (Ling and Yen, 2001), while others consider it a business strategy that provides
seamless integration of every area of business that touches the customer (Sathish et al., 2002).
According to Payne (2006), CRM is a business and marketing strategy that integrates
technology, processes and business activities around the customer. Some further studies h​ ave
explored CRM in terms of the opportunities it provides for profit maximization, for instance
through attracting and retaining “economically valuable” customers while getting rid of
“economically invaluable” ones (Pan and Lee, 2003). Bradshaw and Brash (2001) consider
CRM to be a management approach that enables organisations to identify, attract, and
increase the retention of profitable customers by managing relationships with them.

Marketing, management and information systems researchers made a range of attempts to

define CRM from three diverse perspectives of ​Philosophy, Strategy and Technological
Solution.​ Ryals and Knox, (2001:535) and Zablah et al., (2004:478) defined CRM within the
frame of Business Philosophy. Karakostas et al., (2005:854), Parvatiyar and Sheth, (2000:4)
and Tarokh and Ghahremanloo (2007:2) defined CRM as a business strategic approach. Bose
(2002:89) and Campbell (2003:375) and Zablah et al., (2004:479) defined CRM as an
enterprise-wide integration of technologies working together, such as data warehouse, web
site, intranet/extranet, phone support system accounting, sales, marketing, and production.

3
Rababah et al., (2010:223) proposed that that the best CRM definition would include all these
perspectives within a comprehensive view. Accordingly, they defined CRM as “​the building
of a customer-oriented culture by which a strategy is created for acquiring, enhancing the
profitability of, and retaining customers, that is enabled by an IT application; for achieving
mutual benefits for both organisations and customers”​ . This definition is used for the purpose
of the present study.

CRM Benefits and Customer Value

Effective CRM implementation can bring many tangible and intangible benefits to
businesses. For instance, Xu and Walton (2005) mention the following major benefits of
implementing CRM: improving customer satisfaction, retaining existing customers, providing
strategic information, and improving customer lifetime value. Gummerson (1994) observed
that CRM could build and sustain long-term relationships with customers, which is a key
issue for enterprises in terms of reaching and maintaining market share and in improving
customer retention and profits. Ryalts and Knox (2001) found that CRM applications could
reduce operational costs, improve profitability/service delivery, and enhance customer
satisfaction, retention, and loyalty. They also note that CRM projects could help enterprises
to gain a competitive edge in the market by enabling the provision of differentiated products
and unparalleled services. Though CRM applications aim to enhance service quality and
value, it is important to note that determining value is intrinsically linked with customer
perceptions, and that there is a need to mirror its benefits with customer expectations. Liou
(2009) stated that with ever-increasing competition for market dominance, many firms have
made use of the CRM system to improve business intelligence and decision-making, to
enhance customer relations and to increase the quality of services and product offerings,
resulting in increasing and sustained levels of profitability.

CRM in Hotels
In a highly competitive environment, hotel businesses have understood the need to improve
the quality of their services in order to retain existing customers while at the same time
attempting to attract new segments (Lu and Wu, 2012). Olsen and Connolly (2000) also
report that one of the key factors of success for hotel businesses is not only the quality of
their products or services, but also the quality and importance of customer relationships. In

4
hotels, CRM applications have a strong focus on identifying and retaining the most profitable
customers and improving the profitability of less profitable customers (Wang and Feng,
2012). It has been proven that hotel businesses that have established CRM receive greater
benefits as a result of finding and retaining the most attractive customers in terms of
profitability and developing long-term relationships with them (Sigala, 2005; Liu, 2007; Lu
and Wu, 2012). Luck and Lancaster (2013) note that CRM plays a critical role in the hotel
industry, in particular for chains of hotels operating nationally, worldwide, or through
international partnerships
Consequently, CRM has become a much debated topic in the hotel industry (Lu and Wu,
2012), and has gradually been applied by hotel businesses in order to increase profits and
improve the relationship between enterprises and customers (Liu, 2007). Investigating the
impact of CRM implementation on hotel performance, Lin and Su (2003) and Daghfous and
Barkhi (2009) both propose that CRM application offers a great opportunity for hotel
businesses to improve their performance in terms of customer lifetime value, customer
satisfaction, and profit. Furthermore, Lo et al. (2010) emphasize the vital role that CRM plays
in bringing about the hotel’s main objectives of customer satisfaction and retention. This can
result in positive reviews, which can in turn lead to increases in customer retention and
revenue. CRM applications help to ​anticipate the needs of a hotel’s current and potential
customers and to optimise revenue by providing optimum customer satisfaction (Brown,
1999).

CRM in Budget Hotels

The budget hotel industry has been expanding rapidly over the past twenty years. According
to Segal (2014) and according to a recently published Mintel report, the budget hotel sector is
the fastest growing and largest area within the United Kingdom hotel business. While there
are budget hotel chains located in continental Europe, their influence and prevalence within
the travel and tourism industries, excepting Germany and France, are less significant than in
the United Kingdom. In the US, the budget hotel dates back to the 1920s (Shen, 2006). The
term “budget hotel” has developed and is now used worldwide. However, while the terms
“budget,” “limited service” and “economy” are used interchangeably across the hospitality
industry, there exists no standardized or even widely accepted definition of this segment
(Roper and Carmouche, 1989; Senior and Morphew, 1990).

5
According to Roper and Carmouche (1989), the term “budget hotel” mainly describes a
variety of accommodation types offering rooms at a proportionately lower rate than the
industry norms, where facilities and services often differ both in extent and type from those
defined as common to traditional full-service hotels. Daniel (1989) mentions that customers
who choose budget hotels could be classified as individuals who travel for business, pleasure,
and personal reasons, and who do not expect conventional accommodation. However, the
current business environment, with its variety of marketing propositions, changes the taste of
travellers, and makes them ​more price sensitive, less brand loyal, and more sophisticated
(Sigala, 2005). Most customers may prefer to cut costs and look for something better than
mere old-style bed and breakfast accommodation (Hua et al., 2009). Changing customer
expectations and increasing market competition in the budget hotel category has drawn
managers’ attention to the importance of customer satisfaction and retention. Imrie and Fyall
(2000) reveal that satisfying customer requirements, attaining loyal customers, and limiting
switching are the key factors for budget hotel success in the UK.
According to Zinekin (1999), all hotels offer almost the same core product/services, hence
the differentiation of their products from those of their competitor via the implementation of
CRM is likely to have a strong impact on the development of customer satisfaction,
long-term customer relationships, and retention, which will result in greater profit. Daghfous
and Barkhi, (2009) observe that customer service is widely recognized as one of the main
ways in which a hotel can differentiate itself from its competitors. Luck and Lancaster (2013)
mention that in spite of hotels being differentiated by their star rating, they tend to offer more
or less the same core products and services: accommodation surrounded by a range of food
and beverage services. Despite this, hotel companies have repeatedly attempted to
differentiate their offerings. A CRM strategy that considers the customer’s needs and places
these at the centre of the business has become a popular marketing strategy among budget
hotels, and has been adopted by a wide variety of chains and independent budget hotels
around the globe, in an effort to enhance customer satisfaction and retention
(Padilla-Meléndez and Garrido-Moreno, 2013; Schweisberger and Chatterjee; 2002). Within
the budget hotel sector, customers attach more importance to value for money in gaining
satisfaction than to loyalty, recognition, or customized services (Luck and Lancaster, 2013;
Brotherton, 2004; Hua et al., 2009). The current study investigates the potential overlap

6
between customer satisfaction criteria and the CRM outcomes that managers believe can lead
to customer satisfaction. The aim of the study is consistent with Tsang and Qu (2000) who
note that the perceptions of tourists and hotel managers in the hotel industry differ, due to
differences in expectations of service quality.

Methodology
A chain budget hotel from the UK was selected as a case study. The budget hotel started its
CRM strategy towards greater customer-centricity in 2003, using software packages,
Business Process Reengineering (BPR), and organizational culture changes. While most
previous studies have tried to investigate the impact of CRM on customer satisfaction via
quantitative approaches (Feinberg, and Kadam, 2002), the current study was conducted using
a qualitative approach and the techniques of semi-structured interviews (Wengraf, 2001) and
content analysis (Neuendorf, 2002). The methodology was employed in two sequential
phases. In the first phase, 12 interviews were conducted with the managers of six branches.
Interview appointments were arranged by Human Resource Departments between May and
June 2013. The selection of the respondents was based, firstly, on their availability, as May
and June is a high season and a busy time for managers. Secondly, more knowledgeable
managers were preferred, in terms of the level of their knowledge of both the CRM project
and the company. Interviews lasted from a minimum of half an hour up to a maximum of one
hour. A mini voice-recording device was used to record the interviews. For ethical reasons,
all interviewees were informed of the presence of the device and asked whether they were
comfortable with it. Managers were asked about CRM implementation processes and what
they thought were the causes of customer satisfaction. There were a total of 12 interviews, as
this was the data saturation point (Bogdan and Biklen, 1982). Table 1 provides the descriptive
information provided by the respondents.

Table 1 – Profile of the respondents

Interviews Branches Occupation Experienc
e
Interview 1 Branch A Human Resource Manager 13 years
Interview 2 Branch A Food and Beverage Manager 4 years
Interview 3 Branch B Duty Manager 9 years
Interview 4 Branch B Sale Manager 4 years
Interview 5 Branch C General Manager 12 years
Interview 6 Branch C Food and beverage Manager 4 years

7
 Interview 7 Branch D Sale Manager 2 years
Interview 8 Branch D Human Resource Manager 3 years
Interview 9 Branch E General Deputy Manager 4 years
Interview 10 Branch E Maintenance Manager 9 Month
Interview 11 Branch F Deputy Manager 3 years
Interview 12 Branch F Housekeeping Manager 1 year

The recorded conversations were fully transcribed by the researchers after each interview.
The first step involved exploring and becoming familiar with the data by reading the
transcripts. Then, a deductive theory via thematic analyses was used (Thorpe and Holt, 2008;
King, 2004), and CRM outcomes with a potential impact on customer satisfaction were used
to design a template for a content analysis of the second phase (Table 2).
The second phase aimed to identify customer satisfaction criteria. Due to the policy of the
selected chain hotel, interviews with customers were not allowed. Hence, a total number of
525 customer comments were gathered from six branches, from May to June 2013.
Comments were collected via regular feedback emails that the company sent out to its guests
after their stay. To ensure consistency, the comments were collected from the branches where
the interviews had taken place. As the main focus of this study was customer satisfaction, the
collected comments were scanned, and the negative and neutral comments were eliminated.
220 positive comments were selected. The comments were content analysed via the emerged
template from the interviews, in order to look for possible overlaps (Christensen and Olson,
2002). In another words, the designed template (King, 2004) was used as the checklist for
content analysing the comments (Kazeminia et al., 2013). Overlapped comments were
extracted and the related codes were counted, based on the number of times they appeared.
The higher the code mentioned, the better customers considered it as a satisfaction criterion.

Interview Results
All managers agreed that the CRM strategy of putting customer needs at the centre of the
business played a critical role in customer satisfaction and retention. The company CRM
programmes were designed to cover all services and facilities offered, in three sequential
phases:​ a) Pre-Stay, b) During-Stay ​and​ c) After-Stay.​

8
a) Pre-Stay Phase:​ This phase aims to make the reservation and check-in process quick,
unique, and efficient. Reservations can be made through the company’s website, travel
agencies or booking websites. The mobile application was also designed to make the
reservation process efficient and flexible. During the reservation process, all customers have
the opportunity to include enquires and preferences. During this phase, before the customers’
arrival, the reservation team starts to customize products and services based on the
customers’ requests. One manager noted that:

Every Wednesday, the reservation manager will spend around 3 hours allocating the
rooms and preparing services. When we have customers with a preference for
one specific food, we prepare the main dish based on this, which could be gluten
free, halal food, or vegetarian, it could also be a preference for a newspaper,
flowers, a pillow, drinks etc. We have to allocate people to the correct rooms
based on what they want or why they are here. If the customer is here to watch a
football match and then have some beer, this indicates that they will return at
around 3-4 am and be a bit noisy as well. So, you give them accommodation in
part of the hotel that is separate from other rooms, so that they won't disturb
other guests. We want to be sure that customers are on the right floor, with the
right services, and that we give them everything they need and have asked for.

The switch from Fidelio software to Opera was mentioned by the managers as one action
taken during the CRM project to make the check-in process efficient and quick, and to avoid
having to wait in a queue. During check-in, a unique profile is created for all customers, to
allow them to list their preferences. This profile is retained for their future stays.

b) During-Stay Phase:​ This phase is based on the philosophy of customers first. During their
stay, customers are provided with customized products and services. This is mostly facilitated
with the help of CRM software that provides staff with related information in order to
personalize services (room services/food and beverage). One of the managers reported that:

We have a list of preferences from our customers and we know what they want, so we
try to provide them with those preferences.​

9
Managers claim that as a part of CRM strategy, organisational changes take place and
customer satisfaction becomes the main part of a staff member’s job description. All staff
members are trained to develop their communication skills. They are encouraged to
communicate with customers and to provide a good atmosphere and a pleasant stay. All
members of staff should be friendly and approachable in all their interactions, and the smile is
the theme of the hotel. One of the managers indicates that:

During the stay we engage with people, we talk to them and ask whether they have
enjoyed their stay or if they need anything. It is about knowing customers, and
members of staff are encouraged to build relationships with customers and to get
to know them on a personal and professional level, so that we can anticipate their
needs and their wants, such as particular places to sit or a particular drink.

As part of the CRM programme, all members of staff are also empowered to deal with
customers’ requests. Empowering staff allows them to deal with customer complains without
wasting time, which results in more efficient problem-solving and greater customer
satisfaction. One of the managers said that:

For example, if someone makes a complain about their food in the restaurant, staff will
try to solve the problem for customer satisfaction, and if they cannot solve it at
that level, they will call the duty manager for help; but they are empowered to
give discounts, free desserts, or refunds.

The check–out process is also designed to be quick and efficient.

c) After-Stay Phase​: This phase includes two parts: ​CRM Reports and ​Loyalty Scheme​. After
checkout, an automatic feedback email is sent to all customers. A CRM satisfaction report
based on the results is then produced. This report includes customer satisfaction rates for
different areas, along with related positive and negative comments. The report is analysed on
a daily basis to identify strengths, weaknesses, and possible areas of development. The report
is also used as a training mechanism, to identify those areas where training is required. The

10
report is also used to locate dissatisfied customers and contact them, in order to give them the
chance of a better customer experience.​ ​One manager revealed that:
I use CRM reports quite a lot in my department. We print the reports, we go through
the good comments and look at the bad comments for each individual area, and
we use CRM as a training mechanism. If, for example, the scores are particularly
low for the bar, I go and have a look to see what comments have been left, to
identify which area of the bar needs improvement. Is it service? Is it the quality of
the food? Is it value for money? The report results are probably the most
important things for teams, as they are directly related to the customer.
The loyalty scheme is based on a points system. Customers who are part of the loyalty
scheme earn points after each stay. The points are used as a marketing tool, and regular
emails are sent to customers including lists of available offers, discounts, or free services.
They also include birthdays and anniversary greetings. One of the managers emphasizes that:
We offer discounts for on-going bookers. We provide 10% off for certain periods of
time when they stayed with us, and sometime we do promotions for the past years
stayers […] we tailor these to whatever we need to provide. We might include
breakfast vouchers, high street vouchers, a ​bottle of water or wine, 10 percent off
F&B, or a stay in another branch. If it is Easter, we do Easter eggs or things like
that.
The CRM outcomes mentioned above emerged as a template (King et al., 2004) for the
thematic analysis of the next phase of the research (Table 2).
Table 2 – CRM outcomes codes and themes (Designed Template)
Theme Codes
Before Stay Efficient reservation process
Efficient check-in process
Staff friendliness
Delivering services with Smile
Empowered staff
Good customer service
During Stay Good atmosphere
Customized general services
Customized room services
Customized food and beverage menu
Efficient check-out
After Stay Anniversary and wedding greetings
Loyalty card and point scheme
Contacting dissatisfy customers

11
Overlaps
In total, 525 comments from May to June 2013 were collected from six branches. As the
scope of the research was limited to customer satisfaction criteria, comments expressing
dissatisfaction were ignored, and 220 satisfaction comments were used in the contents
analysis. 61 comments out of 220 related to the CRM outcomes. Table 3 shows the potential
overlaps between CRM outcomes and customer satisfaction criteria.
Table 3 – Overlaps between customer satisfaction criteria and CRM outcomes
customers
CRM Stage satisfaction
CRM Outcomes N %
criteria
Efficient reservation process ✔ 3 4%
Before Stay
Efficient check-in process ✔ 1316%
Staff friendliness ✔ 3140%
Delivering services with Smile ✔ 3 4%
Empowered staff ✔ 912%
Good customer service ✔ 5 6%
During Stay Good atmosphere ✔ 4 5%
Customized general services ✔ 1 1%
Customized room services ✔ 1 1%
Customized food and beverage menu - - -
Efficient check-out ✔ 911%
Anniversary and wedding greetings - - -
After Stay
Contacting dissatisfied customers - - -
Loyalty card and point system - - -
100
79
%
Note: In total, codes were repeated 79 times and some of the comments included more than
one code.
Quick reservation and check-in processes are mentioned by customers as satisfaction criteria
with an overlap with pre-stay outcomes of CRM. Staff friendliness, delivering services with a
smile, dealing with customer complains, good customer service, a good atmosphere and the
efficiency of checkout were mentioned by customers as satisfaction criteria that overlap with
the ​during-stay outcomes of the CRM. While customising services is one the main concerns
of hotel CRM strategy, only 2 out of 61 comments related to customised services. As shown
below, one comment was related to the food and beverage department:

The restaurant staff made a great surprise for our wedding anniversary.

12
Another comment was related to putting customised newspapers in the room:

Irish papers in the room were a great idea. It gave us the feeling of home away from
home.

While the company uses the loyalty scheme as a marketing tool to retain existing customers,
no related comments were found. No comments related to anniversary/wedding greetings or
contacting dissatisfied customers were found. It needs to be taken into account that although
customer satisfaction criteria overlaps with some CRM outcomes, comments related to CRM
comprised only 28% of the total comments. 72% of comments belong to areas that are not the
outcomes of the CRM. These criteria include the core products of hotels, namely hotel
cleanliness, lobby decoration, room cleanliness, room decoration, room size, bed size, bed
comfort, bathroom cleanliness, food quality, breakfast selections, selection of TV channels,
hotel location, room amenities, disabled access, children’s facilities, security, and parking
facilities. Among the above-mentioned criteria, ​room decoration, hotel cleanliness, bed
​ ere among frequently counted satisfaction criteria by
comfort and value for money w
customers (Table 4).
Table 4 - Customer Satisfaction Criteria (not the outcomes of CRM)
Customer Satisfaction Criteria N %
Hotel cleanliness 29 11%
Lobby decoration 8 3%
Room cleanliness 21 9%
Room decoration 30 12%
Bed comfort 25 10%
Value for money 29 12%
Room size 9 4%
Bed size 6 2%
Bathroom cleanliness 6 2%
Food quality 11 4%
Breakfast selections 24 10%
Great selection of TV channels 2 1%
Hotel location 13 5%
Room amenities 17 7%
Disable access 4 2%
Kids facilities 2 1%
Security 6 2%
Parking facilities 4 2%
Total 24 100%
6

13
Note: ​In some comments, there was more than one criterion.
Conclusion
As Nasution and Mavondo (2008) mention, there are reasonable grounds to expect
differences between management’s evaluation of customer service and what customers
actually experience. As Salehand Ryan (1991) observe, there is a potential gap between
expectation and actual performance, and differences between the perception of service by the
service provider and service receiver. In the hotel industry there are some specific problems
involved in the evaluation of service provision (Nasution and Mavondo, 2008). This study
has considered the perspectives of both the organization and the customers, and has made a
number of contributions to the study of CRM implementation and customer satisfactions in
budget hotels. The study results suggest that while customer satisfaction criteria overlap with
some CRM outcomes, the main goals of CRM projects, namely customised products/services
and loyalty schemes, are not considered to be a satisfaction criteria by customers. As Table 2
shows, staff friendliness was the most frequently mentioned customer satisfaction criteria that
overlapped with CRM outcomes. Staff friendliness is a part of organisational culture, and this
highlights the impact of organizational culture on implementing CRM strategies (Iriana and
Buttle, 2006) and the vital role of human resources in CRM projects (Mendoza et al., 2006).
This is also in line with Curry and Kkolou (2004), who define CRM as a cultural process, and
not a set of management tools but a management philosophy, a way of running the business.
The study also suggests that CRM implementation in budget hotels cannot be considered as a
key to success unless the differences between the perceptions of managers and customers are
addressed properly. We can conclude that regardless of the changes in customers’
expectations and services in budget hotel, customers remain more interested in core products
and a comfortable stay than in customised products and services. While customers value
some products or services above others (Solomon, 2009; Luck and Lancaster, 2013;
Brotherton, 2004) within budget hotels, in terms of satisfaction they attach more importance
to value for money than to loyalty, recognition, and customized services. This is also in line
with the view expressed by a manager:

You can give the customer exactly what they want, but the biggest areas you have to
look at are that they want a bed and breakfast, they want a smile, and they want
helpful staff […].

14
From a managerial point of view, the study indicates that while budget hotels are making a
substantial investment in their CRM programmes, there is a clear gap between managers’
understanding and customer perceptions. Therefore, hotels should invest in customer
understanding and customer satisfaction criteria through market research and other
information gathering and analysis procedures before investing in CRM programmes. The
study has highlighted that customer satisfaction criteria and values perceived by managers are
different than those perceived by customers, and that there needs to be a greater symmetry
between these two points of views. In the current business environment, hotels should not
only identify the specific criteria of their target customers, but also aim to excel in these if
they are to outperform competitors and retain the interest of their existing and potential
customers. Considering the challenges of implementing CRM projects with the limited
resources of budget hotels, the study recommends that instead of customising products and
services, budget hotels should focus on their core products and value for money in order to
increase customer satisfaction and retention. The word cloud below (Figure 1) shows the
main core products that can cause customer satisfactions in budget hotels.

Figure 1- Cloud word of core products that can cause customer satisfaction

Limitation
T​his study has some limitations. ​As the focus of the research was customer satisfaction, only
positive comments were selected for content analysis. Future research could be conducted

15
that would take into account both positive and negative comments, in order to find potential
overlaps between CRM outcomes and customer dis/satisfaction. In accordance with the
adopted strategy of using a case study, the themes and codes came out of interviews
(deductive approach), and future research could also include the related literature (inductive
approach). Interviews with customers were not allowed, and the analysis was conducted
based on comment cards. Future research could be conducted by interviewing customers in
order to obtain more in-depth information. Company comment analyses might not fully
reflect the views of satisfied customers, and this also needs to be considered a limitation of
the research.

References

Blankson, C., & Stokes, D. (2002). Marketing practices in the UK small business sector.
Marketing Intelligence & Planning, 20(1), 49-61.

Bogdan, R. C., & Biklen, S. K. (1982). ​Qualitative research for education​. Boston: Allyn and
Bacon.

Bose, R. (2002). Customer relationship management: key components for IT

success. ​industrial management and data systems​ (2), 89-97.

Bradshaw, D, & Brash, C. (2001). Management customer relationships in the e-business

world” how to personalise computer relationships for increased profitability, ​International
Journal of Retail and Distribution Management​ 29 (12), 520 – 530.

Brotherton, B. (2004). Critical success factors in UK budget hotel operations. ​International

Journal of Operations and Production Management​ 24(9), 944-969.

Brown, S.A. (1999). ​Strategic Customer Care: An Evolutionary Approach to Increasing

Customer Value and Profitability​, John Wiley, Canada, Toronto.

​ reating customer knowledge competence: managing customer

Campbell, A. J. (2003), ​"C
relationship management programs strategically​",​ ​Industrial Marketing Management,​ Vol.32
No.5, pp. 375-383.

Christensen, G. L., & Olson, J. C. (2002). Mapping consumers' mental models with
ZMET. ​Psychology and Marketing​ 19(6), 477-501.

16
Croteau, A.-M., & Li, P. (2003). Critical Success Factors of CRM Technological Initiatives.
Canadian Journal of Administrative Sciences​ 1(20), 21-34.

Curry, A., & Kkolou, E. (2004). Evaluating CRM to contribute to TQM improvement–a
cross-case comparison. ​The TQM Magazine​, 16(5), 314-324.

Daghfous, A. & Barkhi, R. (2009). The strategic management of information technology in

UAE hotels: An exploratory study of TQM, SCM, and CRM implementations, ​Technovation
29, 588-595.

Daniel, Cdw. (1986). Economy hotels in the USA​.​ ​Travel and Tourism Analyst​, (June).

Deloitte & Touche (2000). ​UK Budget Hotel Survey,​ Deloitte and Touche, St Albans.

Dyche, J. (2002). T​he CRM Handbook, A Business Guide to Customer Relationship

Management,​ Addison-Wesley, Information Technology Series.

Feinberg, M. E., Greenberg, M. T., Osgood, D. W., Anderson, A., & Babinski, L. (2002). The
effects of training community leaders in prevention science: Communities That Care in
Pennsylvania. ​Evaluation and Program Planning,​ 25, 245–259.

Feinberg, R., & Kadam, R. (2002). E-CRM Web service attributes as determinants of
customer satisfaction with retail Web sites. ​International Journal of Service Industry
Management,​ ​13(​ 5), 432-451.

Fiorentino, A. (1995). Budget hotels: Not just minor hospitality products. ​Tourism
Management​ 16(6), 455–462.

Gummesson, E. (1994). Making Relationship Marketing Operational. ​International Journal

of Service Industry Management​ 5(5), 5-20.

Hua, W., Chan, A. & Mao, Z. (2009). Critical success factors and customer expectation in
budget hotel segment – A case study of China. ​Journal of Quality Assurance in Hospitality
and Tourism,​ 10(1), 59-74.

Huang, C.-Y., Chou, C.-J., & Lin, P.-C. (2010). Involvement theory in constructing bloggers'
intention to purchase travel products. ​Tourism Management,​ 31 (4), 513-526.

Imrie, R. & Fyall, A. (2000). Customer Retention and Loyalty in the Independent
Mid-Market Hotel Sector, ​Journal of Hospitality and Leisure Marketing,​ 7 (3), 39-54.

17
Iriana, R., & Buttle, F. (2006), Customer Relationship Management (CRM): system
implementations​, ​International Journal of Knowledge, Culture and Change Management,​ 6
(2), 1-15.

Karakostas, B., Kardaras, D., &Papathanassiou, E. (2005), ​"T ​ he state of CRM adoption by
the financial services in the UK: an empirical investigation​",​ ​Information and Management​,
Vol.42 No.6, pp. 853-863.

Kasim, A., & Badriyah Minai. "Linking CRM strategy, customer performance measures and
performance in the hotel industry." ​International Journal of Economics and Management​ 3.2
(2009): 297-316.

Kazeminia, A., Del Chiappa, G., & Jafari, J. (2013). Seniors’ Travel Constraints and Their
Coping Strategies. ​Journal of Travel Research,​ 8 October.

King, N. (2004). Using templates in the thematic analysis of text, in C.Cassell and G.Symon
(Eds.) ​Essential Guide to Qualitative Methods in Organizational Research.​ London: Sage.

King, N., Cassell, C., & Symon, G. (2004). Using templates in the thematic analysis of
texts. ​Essential guide to qualitative methods in organizational research,​ 256-270.

Lin, Y. & Su, H. (2003). Strategic analysis of Customer Relationship Management - a field
study on hotel enterprises.​ Total Quality Management​ 14(6), 715-731.

Ling, R., & Yen, D. C. (2001). Customer relationship management: An analysis framework
and implementation strategies.​ Journal of Computer Information Systems​ 41 (3) 17.

Liou, J. J. H. (2009). A novel decision rules approach for customer relationship management
of the airline market. ​Expert Systems with Applications,​ 36 (3, Part 1), 4374-4381.

Liu, H. (2007). Development of a framework for customer relationship management (CRM)

in the banking industry. ​International Journal of Management,​ 24(1), 15-20.

Lo, A.S., Stalcup, L.D. & Lee, A. (2010). Customer relationship management for hotels in
Hong Kong. ​International Journal of Contemporary Hospitality Management,​ 22(2),
139-159.

Lu, C., & Wu, S. (2012). The relationship between CRM, RM, and business performance: A
study of the hotel industry in Taiwan. ​International Journal of Hospitality Management​.
31(1), 276-285.

Luck, D. & Lancaster, G. (2013). The significance of CRM to the strategies of hotel
companies. ​Worldwide Hospitality and Tourism Themes,​ 5, (1), 55-66

18
Mendoza, L., Marius, A., Pérez, M., & Grimán. (2006), Critical Success Factors for a
Customer Relationship Management strategy​, ​Information and Software Technology​, 49 (8),
913-945.

Meyer, C. & Schwager, A. (2007). Understanding customer experience. ​Harvard Business

Review​. 85 (2), 116-26.

Mithas, S., Krishnan, M. S., & Fornell, C. (2005). Why Do Customer Relationship
Management Applications Affect Customer Satisfaction? ​Journal of Marketing,​ 69(4),
201-209.

Moriarty, J., Jones, R., Rowley ,& J., Kupiec-Teahan, B. (2008). Marketing in small hotels: a
qualitative study. ​Marketing Intelligence and Planning,​ 26(3), 293-315.

Nasution, H. N., & Mavondo, F. T. (2008). Customer value in the hotel industry: What
managers believe they deliver and what customer experience.​International Journal of
Hospitality Management​, ​27​(2), 204-213.

Neuendorf, K. A. (2002). ​The content analysis guidebook.​ Sage.

Olsen, M.D. & Connolly, D.J. (2000). Experience-based travel. How technology is changing
the hospitality industry, ​Cornell Hotel and Restaurant Administration Quarterly,​ February,
30-40.

Ozgener, S. & Iraz, R. (2006). Customer relationship management in small-medium

enterprises: The case of Turkish tourism industry. ​Tourism Management,​ 27(6), 1356-1363.

Padilla-Meléndez, A. & Garrido-Moreno, A. (2013). Customer relationship management in

hotels: examining critical success factors, ​Current Issues in Tourism​, 18 June, 1-10.

Pan, S. L., & Lee, J.-N. (2003). Using e-CRM for a unified view of the customer. Association
for Computing Machinery. ​Communications of the ACM,​ 46(4), 95-99.

Parvatiyar, A. & Sheth, J. N. (2000). The Domain and Conceptual Foundations of

Relationship Marketing. In J. N. Sheth and A. Parvatiyar (Eds.), ​Handbook of Relationship
Marketing​ (pp. 3-38). Thousand Oaks, CA: Sage.

Peppers, D. & Rogers, M. (1993). ​One to One Future: Building Relationships One Customer
at a Time​, Currency/Doubleday, New York, NY.

Rababah, K., Mohd, H., & Ibrahim, H. (2010). ​A unified definition of CRM towards the
successful adoption and implementation.​ In the 3rd Lifelong Learning International
Conference (3LInC'10), Kuala Lumpur, Malaysia.

19
Roper, A. & Carmouche, R. (1989). Budget hotels – a case of mistaken identity? ​Journal of
Contemporary Hospitality Management,​ 1(1),25-31.

​ ross-functional issues in the implementation of relationship

Ryals, L., & Knox, S. (2001), ​"C
marketing through customer relationship management ​",​ ​European Management Journal​,
Vol.19 No.5, pp. 534-542.

Sathish, S., Shan, L.P. & Raman, K.S. (2002). ​Customer Relationship Management Network:
A New Approach to Studying CRM,​ Eighth Americas Conference on Information Systems.

Schweisberger, J., & Chatterjee, A. (2002). Effective CRM Implementations. ​Hospitality

Upgrade​.

Segal, H. (2014) ​Hotels UK - October 2014, ​World Wide Web: Mintel.

Senior, M., & Morphew, R. (1990). Competitive strategies in the budget hotel
sector. ​International Journal of Contemporary Hospitality Management​, ​2​(3).

Shen, H. (2006). The history and future of budget hotels in China. ​Retrieved on April,​ ​6,​
2007.

Sigala, M. (2005). Customer Relationship Management in Hotel Operations: managerial and

operational implications, ​International Journal of Hospitality Management,​ 24 (3), 391-413.

Solomon, M. (2009). ​Marketing: Real people, real decisions​. Chicago: Pearson Education.

Tarokh, M., & Ghahremanloo, H. (2007), ​Intelligence CRM: A Contact Center Model​. In
proceedings of IEEE International Conference on Service Operations and Logistics, and
Informatics, 2007,SOLI.

Thorpe, R., & Holt, R. (eds., 2008). ​The Sage dictionary of qualitative management research.​
London: Sage.

Wang, Y. & Feng, H. (2012). Customer relationship management capabilities: Measurement,

antecedents and consequences. ​Management Decision,​ 50(1), 115 – 129.

Wengraf, T. (2001). ​Qualitative research interviewing: Biographic narrative and

semi-structured methods​. Sage.

Wu, S. & Lu, C. (2012). The relationship between CRM, RM, and business performance: A
study of the hotel industry in Taiwan, ​International Journal of Hospitality Management 31,
276–285.

20
Xu, M. & Walton, J. (2005). Gaining customer knowledge through analytical CRM,
Industrial Management and Data Systems,​ 105 (7), 955-971.

Zablah, A.R., Bellenger, D.N., & Johnston, W.J. (2004). An evaluation of divergent
perspectives on customer relationship management: Towards a common understanding of an
emerging phenomenon. ​Industrial Marketing Management,​ 33, 475– 489.

Zinekdin, M. (1999). Exploring the common ground of total relationship management (TRM)
and total quality management (TQM), ​Management Decision​, 37 (9), 719 – 730.

21